Topline
President Donald Trump threatened on Friday to impose “massive” tariffs on China after Chinese officials unveiled broader trade restrictions on rare earth minerals, deepening the trade gap with the US, ahead of expected talks between Trump and Chinese President Xi Jinping later this month.
Trump will hold talks with Chinese President Xi Jinping later this month.
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Key facts
Trump, in a truth social after On Friday, it accused China of a “rather sinister and hostile move” for tightening export controls on rare earths and other materials and said the US is preparing a “massive increase in tariffs on Chinese products entering the United States of America.”
Trump said there now “seems to be no reason” for a meeting with Xi, with whom Trump was due to hold talks in South Korea later this month.
China, which processes 90% of all rare earth metals, announced On Thursday, foreign companies must obtain permission from the Chinese government to export products containing rare earth minerals and explain their intended use, with similar restrictions on lithium batteries and some graphite exports.
Trump accused China of “clogging” markets and “making life difficult for virtually every country in the world, especially China,” adding that the U.S. has been approached by unspecified countries “that are extremely angry about this major trade hostility that came out of nowhere.”
Crucial quote
“There is no way that China should be allowed to hold the world ‘captive’, but that appears to have been their plan for some time now, starting with the ‘magnets’ and other elements they have quietly assembled in a somewhat monopoly position, a rather sinister and hostile move to say the least,” Trump wrote.
Trump’s tariff threat is leading to a sell-off in the broader market
The Dow Jones Industrial Average fell about 340 points (0.7%) after Trump’s post, with further declines among the S&P 500 (-1.7%) and Nasdaq (1.6%). Technology companies, many of which rely on China’s rare earth exports, reported losses for the Nasdaq, with declines Friday morning for AMD (5%), Qualcomm (4.5%), Broadcom (2.3%), Meta (2.3%), Tesla (2.2%), Apple (1.8%) and Nvidia (1.5%). Stocks linked to rare earth minerals, such as MP Materials and USA Rare Earth, rose 15% and 19%, respectively.
This is a development story.
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